Corporate Tax - Juridical Persons

Frequently Asked Questions

A “juridical person” is an organisation that was created or otherwise acknowledged in accordance with UAE law or the laws of another country and that is legally distinct from its creators, owners, and directors.

Limited liability companies, foundations, ‘onshore’ trusts, public or private joint stock companies, and other entities with independent legal personalities as defined by the relevant UAE’mainland’ law or Free Zone rules are examples of domestic juridical persons in the UAE.

If an entity has separate legal personality, it has independent rights, responsibilities, and liabilities. As a result, the owners of the juridical person would normally only be held partially liable for the debts and liabilities of the company.

Unless expressly excluded, any actions conducted by a juridical person shall be regarded as “business activities” and fall under the umbrella of the UAE CT.

No, unless the foreign juridical person is “effectively managed and controlled” in the UAE and is regarded as a resident entity for UAE CT purposes.

Based upon if the holding company is located in a Free Zone or on the mainland of the UAE, UAE CT would apply to UAE holding companies (at a 9% CT rate or the 0% Free Zone CT rate), but dividends and capital gains from domestic and foreign shareholdings would typically be excluded from CT, bound to specific requirements.

No, although when a relevant business or commercial activity is carried out, people who carry on business in the UAE through a sole proprietorship or civil business may be liable to CT.

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